Made in U.S.A. Movement - 1915
By Dexter W. Hewitt
During the past few months I have had the pleasure of discussing the “Made in U. S. A.” movement with many of the most influential men in the dry goods trade.
Then, too, I have talked with bankers and importers about the possibility of establishing American made products in foreign countries. All in all, I have had the good fortune to be in a position where authoritative and accurate information could be had; and I have put this information together in a more or less usable way.
Before me on the desk is a pile of letters from some of our subscribers living in widely separated sections. Each letter asks for my opinion on how best to advertise “Made in U. S. A.” merchandise and to feature relative values of certain lines of foreign and domestic merchandise.
These questions have made it seem advisable to publish certain facts which will give in brief the sum total of the possibilities of substituting goods “Made in U. S. A.” for those which have originally come from Europe.
In considering this question it is well to note at the outset that less than 10 per cent. of the merchandise consumed in this country comes from abroad. But even so, this 10 percent. Amounted to the sum of over two billion dollars last year.
Despite the war, we imported into this country for the twelve months of 1914 $1,858,644,000 worth of merchandise as against $1,762,666,000 for 1913, which is an increase of 5.4 percent. Our exports for the year 1914 fell off 16 percent; but just at present our exports are increasing rapidly.
Let us also understand that in dry goods lines, which include cottons, woolens, gloves, linens, etc., there were in bond in October in New York scarcely a million dollars less than a year ago, which is less than a 10 percent shortage.
It is foolhardy to suppose that there will be no shortage in merchandise as a direct result of the European war. That the shortage will occur is as sure a fact as the setting of each day's sun.
However, it is quite probable that this shortage will not be acutely felt until well along into the Spring, and will result from at least three causes, namely, the difficulty of securing labor abroad, impaired shipping facilities and scarcity of raw materials.
Already the shortage in linens and wools has been felt, and as there is no American substitute for the flax from which linens can be made, there seems little possibility of a return to normal conditions in this line for the present.
The fact that England has placed a strict embargo on wools has made a considerable difference, especially with carpet manufacturers. However, the manipulation of the market by certain well-known forces has had much more to do with the situation.
In certain grades of silks the superiority of the American-made product is recognized. This includes the cheaper and medium-priced merchandise. European firms are today unable to compete with American firms except in high grades of fancy silks, so that the outlook for America would seem to be a greater demand for American made goods.
We are, however, at the beginning of a slight change in the silk field, for the price on raw silk has advanced very materially within the past two weeks.
This is due to the fact that Japan has had her troubles with an over-production of silk just as we have had trouble with an over-production of cotton, and the Japanese Government is now making loans to silk growers to manipulate the market and raise the price of raw silk.
There was in bond recently in New York $1,823,357 worth of imported silk dress goods, in addition to large stocks in importers' and merchants’ hands, so that there will be little pressure for the present on the American manufacturer to buy much raw silk at the increased price which is bound to come.
Several recent communications from Germany indicate that shipments although slow are coming through regularly. The effort of the German Government to have as little difference as possible in manufacturing and general affairs during the time of war no doubt has an influence on the comparatively smooth surface of German business.
Suppose we take for granted that American firms are fully equal to the task of manufacturing merchandise which will successfully compete with that made abroad.
Suppose we have successfully entered every field in America where foreign merchandise now has control. Is this enough? Shall we then sit idly by when other countries are calling for our merchandise?
The time has passed when thinking Americans believe that our export trade should be used only as an over-flow from the American market. Since last August a great cry has gone up from the country to enter such fields as South America.
Ways and means are being discussed daily for a profitable extension of our trade to that country. But we find ourselves in the unfortunate position of being unable to transport our merchandise to foreign markets at a price which will hold such trade for us.
“Give new freedom to our railroads and our dying merchant marine so that they can aid our crusade for foreign trade and permit American labor employers to combine abroad so as success fully to compete there against foreign combinations paying much lower wages.”
This voices the thought which is to-day in the minds of many of the leading American business men.
Ten years ago if the difficulties now encountered had been stated to a Western grain grower or a Southern cotton planter, he would have told you that if foreign ships could carry his merchandise cheaper than American boats, he would give them the business.
Today his reply would be different, whether he hails from New England, the Middle West, the Far West or the South, he is vitally interested in having his merchandise carried by American ships, because the exorbitant freight rates he is obliged to pay foreigners makes exporting impossible.
In studying the question of better export facilities he has come across the question of railroad rebates. He has discovered this fact—that the so-called evil in this country is not only over shadowed but lost sight of because of the magnitude with which rebating is carried on in foreign countries to our disadvantage.
There are two great points which he has come to consider. First, how it may be possible to meet the competition of the foreign shipping conference combine in ocean freights which annually transfers from our pockets to those of foreigners at least $600,000,000.
Second, how it is possible to pass legislation through Congress which will hold out a special inducement for merchants and manufacturers in the interior to ship their merchandise over railroads going to the coast.
He finds himself effectually blocked in both these lines: first by the Sherman Anti-Trust law, and second, by the Interstate Commerce Commission.
If it were not impossible for him to combine with his American competitors abroad, he would have little difficulty in asserting his superiority in merchandising and in shipping; and if he could get his goods from the interior to the seaports at a reduced rate, the increased cost of labor in this country and the high-water freight rates would be overcome, and his merchandise could be sold on a par with that of his foreign competitors—provided he could secure American ships.
It will not be a digression to take a little look into the history of our merchant marine. Then we will understand why it is high time we get back to such marine laws as those instigated at the time of Washington, Jefferson and Madison.
Today we carry about 8 percent. of the merchandise we sell to foreign countries, in American bottoms. To say that this is shameful is putting it weakly, for we find that such laws as were put upon the statute books in 1789, when we carried 23 percent, by 1800 advanced the figure to 89 percent., and by 1810 to 91% percent.
Then in 1828, when we were still carrying 89 percent., the old quarrel which was destined to end in serious difficulties, actuated the South and West to combine against the shipping interests of New England, and laws were passed which opened our trade to foreign competition. This was the beginning of the decline which has ended within 8 percent. of the bottom of the scale.
The quarrel between the North and the South has been settled and there is no further need of discussion on that time-worn subject. Today the South, the West and New England are all intensely anxious to return to the days of American ships for American merchandise.
How then is the present condition to be bettered?
In 1913 under the tariff law there was a 5 percent inducement to those shipping goods in American bottoms but foreign governments with the characteristic jealousy with which they guard their commerce entered copious protests, fearing as they did that this offer would bring back the prosperity which our shipping enjoyed in 1800. And for some reason or other they “got away with it.”
Through the bungling of the State Department treaties were made which in the judgment of the Attorney-General annulled and made void the clause offering the 5 percent inducement. That foreign powers had their share of laughter over this bungling was known all over the world and that they are still laughing is no secret.
These treaties, however, are in no way binding for a long period of time, for any of them may be terminated on the proper notice without injuring our relations with foreign powers, but it will take a very high degree of diplomacy to do this, and many are not at all certain that the State Department of the present can handle the matter as it should be.
What the State Department needs is a tighter rein from the President and from Congress. We should at once terminate those treaties which have formed a mesh around any action of our merchant marine, and we should make some revision of the Interstate Commerce Commission so that inducements may be offered to farmers and manufacturers in getting their goods to the seacoast for foreign exportation.
There is a crying need for a revision of the Sherman Anti-Trust law which now prohibits combinations for the purpose of fighting together the very strong force of allied foreign commercial interests which have wiped our merchant marine from the seas.
These three points, if taken up by the government and properly corrected, would give private interests such an incentive to produce an adequate merchant marine that within ten years we could again be on the footing that we were in 1800.
The question is then raised: If the government should act promptly on these measures, would it not take a long time to get them into working order?
Undoubtedly it would, and for this reason the bill now before Congress would provide shipping facilities until the interests of the country had been taken care of by private shipping concerns.
There is no dodging the fact that at present there is, as the President says, no other way of getting ships than through the instrumentality that is suggested in the ship bill.
It is to be hoped that this measure will be passed by Congress and that there will be a continued agitation of the merchant marine question until it has been put on a basis equal, if not superior, to that of foreign merchant marines.
The situation in dyes continues to be acute, owing to the fact that the transportation from Germany is extremely difficult. The two steamers, the Matanzas and the Sun, both of which are far from seaworthy, have brought cargoes of dyes to this country via Rotterdam.
These dyes have lasted the country for a limited time, but the situation is by no means bright for the future owing to the difficulty of securing seaworthy boats as carriers.
There has been much agitation about the possibility of manufacturing dyes in this country but owing to the short time this question has been under discussion, nothing of material advantage has been accomplished.
The question of whether or not it is possible for New York to design and manufacture styles which have an equal demand with those of Paris has been much talked of recently.
Many of the leading houses are still receiving Paris models from that city. These have not come through in quantities as formerly, owing to the fact that many of the designers have practically gone out of business.
The proprietors of these concerns have gone to the front. If fashions are to be designed and sold in New York City rather than Paris, there is only one great question arising.
It is not a matter of whether or not the American fashions can be sold as easily with the “Made in U. S. A.” label as with a made in Paris label, but rather of whether or not the designers in New York City have the ability of the French for creating fashions and whether or not the quality of the garments will be equal to those imported.
As in all lines, the underlying principle of the “Made in U. S. A.” label is quality merchandise.
For many years the wooden nutmeg spirit has permeated many lines of American business, and the quality idea has made its strongest appeal to American manufacturers. Many of our manufacturers have been satisfied to manufacture goods in large quantities regardless of quality.
Now that the American public is confronted with the necessity of using American merchandise, there is a deal of mistrust to be overcome, but it is gratifying to find what trademarks on certain merchandise have done for better quality.
Here is the opportunity of a life time for the dress goods manufacturer. It is proved beyond the shadow of a doubt that many kinds of American dress goods are equal in quality and finish to those manufactured in France and England.
The difficulty of producing them at present because of a shortage of labor, has placed that industry in bad conditions abroad. Also it must be remembered that the armies on both sides consume a tremendous amount of wool fabrics which would at any other time be made into cloths of a finer finish.
At a recent exhibition of “Made in U. S.A.” merchandise, the product manufactured in this country was considered just as good if not superior to the foreign fabric, by several of this country's leading fashion authorities.
However, the dress goods industry is confronted by two serious situations. First, England's embargo on wool, which leads to the difficulty in securing raw materials, and second, the dye situation.
So far, the dress goods market has been well handled, owing to the fact that somber shades have been much in vogue. As the dyes for these fashionable colors may be secured from other than German sources, the situation is not as acute as in some of the other lines dependent on colorings.
Report has just been made that the steamship Shimosa has arrived in Yokohoma, Japan, from New York, via the Panama Canal, with a general cargo of 7,000 tons. This is the first ship to arrive in Japan by the Panama Canal, and points to a new decade in American shipping.
With the completion of this tremendous work, the time of deliveries between America and Asia is made much quicker. This is of great importance to our exporting merchandise and our importing of raw materials, especially at this time when it is taking nearly double the usual length of time to cross even the Atlantic because of war conditions.
“Made in Germany” has become so well-known in the toy field that many of us are inclined to forget that in the little town of Winchendon, Mass., is one of the largest toy manufacturing concerns in the world.
Although the toy supply is very much curtailed by the European war, there is at present an excellent opportunity for manufacturers of this product in America not only to increase their business, but to dominate the world with their product labelled “Made in U. S. A.”
After investigating every line of department store merchandise and its possibilities for use in other countries, it would seem that we can safely make this conclusion:
That, taken as a whole, goods “Made in U. S. A.” are equal if not superior to those manufactured in Europe, and now that the United States has the impulse to enter many markets which heretofore have been closed to her merchandise, the most important issue in national politics is to see that this end is accomplished as speedily as possible and to the best advantage of the American business man.
The dye, wool and shipping situations are the most poignant at present, and as soon as these are attended to, and financial and credit ends have received careful attention, it is highly probable that the American manufacturer will be placing his goods in every market of the world to a greater extent than European nations.
Rise in Raw Silk
An indication which, we believe, points towards an increased consumption of silks and ribbons is the marked rise in the price of raw silk which has taken place in the last two weeks. As we go to press the market is still rising and manufacturers who refrained from purchasing on the first advance are beginning to come into the market.
This advance has, no doubt, been stimulated by the reported action of the Japanese Government in authorizing loans to silk producers who wish to hold their product for higher prices, but we are of the belief that an increased demand is fully as largely responsible.
Notwithstanding this advance, however, many of the leading manufacturers of high grade ribbons have announced reductions of from 5 to 10 percent. within the last two or three weeks.
We are of the opinion that the retailer should be very cautious about making any reductions in his prices, however, as the former scale of prices will probably be restored by the manufacturers in an exceedingly short time.
Hewitt, Dexter W., “The Spring Fashions” in Dry Goods Guide, New York: Black Publishing Company, Vol. 35, No. 1, January 1915, p. 12-15.